The Issue with Gold and Other Precious Metals

Precious metals, and gold in particular, have endured a difficult time of late, as their value has fluctuated in line with numerous events and external conditions. This turbulent period may finally be coming to an end, as prices rose slightly this week on the back of new U.S. data releases that favoured the weak side of market expectations.

While the performance of gold remains the standard bearer among precious metals, however, its reign as the dominant monetary instrument within this field is set to be challenged. This is because silver is set to become the leading precious metal performer in 2014, after years of steady growth and significant gains in value.

The Rise of Silver and Why it Will Usurp Gold as the Dominant Precious Metal

At present, gold remains the most renowned and widely purchased metal. It is well known as a source of tremendous value and security, especially during times of economic hardship or uncertainty. As it stands, China continues consume the vast majority of the cumulative world gold production, and far more than any other precious metal currently on the market. This is set to change, however, as silver continues its rise to prominence in the wake of unrelenting demand and an increasingly paucity of supply.

The key factor behind this trend is the relative affordability of silver in relation to gold. With the price of gold now moving north of $1,500 per ounce once again, there may be some investors who will feel that this particular precious metal no longer offers the same returns it did throughout the majority of 2013. In contrast, silver can be purchased for just $30 per troy ounce, and its growing value as a precious metal means that investors can look forward to far more substantial gains in the year ahead if they conduct thorough market research.

This trend is based on a long standing point of economic principle, as the fact remains that one the value of gold exceeded $400 the majority of investors began to consider alternative precious metals. In addition to this, it was as far back as the 1970’s that silver began to outstrip gold in terms of rising value. Between 1970 and 1979, gold increased to 24 times its initial value, while silver rose by a staggering 36 times. In hindsight, this was the beginning of a trend that has continued until the present day, to the point where silver is now recognised as a valuable investment and far more that an industrial metal with practical applications. It is now considered to be an inherent source of wealth,

Investing in Silver: The Future and Necessary Considerations

Historically, the demand for silver has always exceeded its supply, but this trend has begun to reverse and by 2015 the opposite may well be true. This will only increase the value of silver, as investors and nations compete for their share of a precious and practical metal. For investors, there is a need to time their transactions wisely, and look to add silver to their portfolio before the price begins to outweigh value and future returns. If you are investing overseas, you may also want to use the Currencies Direct website to investigate exchange rates and minimise your initial outlay.

 


Categories: Precious Metals Market

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March 25, 2014 The Issue with Gold and Other Precious Metals